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Compare the true cost of buying vs renting over time · US market · 2026
Buying becomes cheaper than renting after this point.
Understanding the true financial comparison beyond just monthly payments.
Many people compare their mortgage payment to their rent and stop there. But buying includes property taxes, insurance, maintenance, and HOA fees — often adding 30–40% on top of the mortgage payment alone.
Buying typically costs more upfront and in the early years due to closing costs and front-loaded mortgage interest. The break-even year is when accumulated equity and appreciation make buying cheaper than renting over the long run.
A 20% down payment on a $350k home is $70,000. Invested in an index fund at 7% annual return, that becomes ~$135k in 10 years. This opportunity cost is real and must be factored into a true buy vs rent comparison.
In high-cost cities like NYC, SF, and LA, renting often wins financially for 10+ years. In the Midwest and Southeast where home prices are lower relative to rents, buying often makes sense much sooner — sometimes within 3–4 years.
All calculations are estimates based on figures you enter and standard financial formulas. Results do not constitute financial, investment, tax, or legal advice. Real estate markets vary widely. Always consult a licensed real estate professional, CPA, or financial advisor before making any housing decision.